The Setting Sun: What an Aging Japan Means for the Balance of Power in East Asia

A Harvard University course from previous years once called Japan Asia's “underperformer.” Other scholars more charitably describe Japan as a declining power, with its influence in East Asia shrinking year after year. A commonly cited cause of this problem is Japan's aging population, which Japanese Prime Minister Fumio Kishida himself said that fixing the country's low birthrate is an issue that "cannot wait."

Indeed, Japan is getting older. Compared to other highly industrialized countries, including those in Asia, Japan historically has had one of the lowest birth rates, and fertility rates have declined to 1.3 births per woman over the last several decades—one of the lowest in Asia. Many of the consequences of this aging population have been extensively discussed in global media: higher public spending on social services, ballooning government debt, and a shrinking workforce. However, the role that aging plays in Japanese foreign policy has often been overlooked.

A Geriatric Peace?

In foreign policy realms, the effect of aging populations on geopolitical stability is partially explained by Geriatric Peace Theory, which predicts that aging societies will require more young workers to sustain the social safety net. Hence, aging societies have fewer young people to recruit for military service, and this reduced military capacity makes them act more peacefully. Social scientists have collected evidence for this claim, highlighting that rapidly aging countries tend to be more peaceful overall.

Yet, though Geriatric Peace Theory posits that aging societies become more peaceful, Japan appears to be an exception. Prime Minister Kishida's recent defense budget will bump Japan's GDP spending from under one percent to roughly two percent of total GDP by 2027, and the Japanese Self-Defense Forces (JSDF) are now due to receive their largest modernization in recent history, including enhancing local productions of missiles, aircraft, and other military equipment. This puzzling case raises a number of questions. How does Japan's military rearmament square with the Geriatric Peace Theory? How can an aging society adequately maintain the tax base and military manpower needed to project power?

The most potent explanation for Japan's rearmament is the rise of Chinese power in the region. The People’s Republic of China, which has had strained relations with Tokyo since the end of World War II, has experienced rapid economic growth and has undertaken extensive military modernization. However, while the rising threat from China certainly plays a role, the issue of aging complicates Japan's foreign policy stances. Traditional military and geopolitical doctrines, especially those that rely on larger manpower pools or a strong employment and manufacturing base, is simply not an option for an aging Japan. Many have used this fact to argue that Japan is in terminal decline.

However, contrary to conventional wisdom, Japan's aging population does not necessarily mean the country is in terminal decline either. Indeed, as Japan has gotten older, many of the country's politicians have become increasingly concerned about transitioning Japan to a military doctrine and grand strategy that will enable it to project power even as the country begins to lose its key taxpaying base and employment-age workforce. These concerns are driving Tokyo to transition to a more high-technology, low-personnel military and develop deeper regional ties with allies (such as India) to stabilize the regional balance of power despite Japan's aging population. Indeed, with the right changes, it is possible that an aging Japan may be as or even more influential in some aspects as compared to the Japan of the last two decades.

Towards a Technopolar Doctrine

What does aging do to a country's military? Most obviously, an older population means that there are fewer individuals of fighting age who can be recruited for service. Additionally, aging countries face budgetary pressures to support social services for seniors, especially in liberal democracies, where senior citizens are an influential part of the electorate. In these states, politicians may reallocate funds from military spending toward maintaining social services.

Japan is no exception to this general principle. An aging population means Japan is increasingly running out of manpower for the JSDF. The JSDF, at present, is numerically capped, limiting the amount of manpower that Japan must call on, but in the event of a conflict or wide-scale mobilization, it is increasingly likely that Japan may not have the requisite manpower needed for such defensive actions.

However, this dynamic is exacerbated in Japan by the increasing divide between the ruling Liberal Democratic Party (LDP) and Japan's population. Much of the Japanese population remains ardently opposed to amendments to Japan's post-war constitution, including the famous Article 9, which renounces the use of war except for self-defense. Not only does the population present a political obstacle to Kishida's rearmament efforts, but its opposition to future conflicts would likely limit the ability of the JSDF to recruit more troops.

Facing these challenges, Japan has increasingly adopted a technology-focused arms doctrine. Recent Japanese defense whitepapers have increasingly admitted that Japan will lack the manpower for a large army, an unusual admission in military circles. Instead, Japanese elites have begun increasingly investing in drones, aircraft, and other high-tech capabilities designed to compensate for the disadvantages of an aging population. Japan is now pioneering a military doctrine that focuses on maintaining a small but elite set of military forces.

For orthodox believers of a numbers-first military doctrine, Japan's shift may seem misguided or unrealistic. However, given Japan's declining population, its shift in military strategy may be the only possible approach. Furthermore, a technology-first military doctrine offers important strategic benefits. Most notably, if the JSDF relies less on manpower and conscripts, the result could limit potential casualties in a conflict and minimize public opposition or distrust that occurs as a result of the war. Additionally, as displayed in Ukraine, drones and other technological tools are also quite cost-effective, especially against larger or more numerically superior adversaries.

Japan's new doctrine appears very similar to the United States’ own force modernization plans for 2030. While this parallel may be coincidental, it could have important benefits for the US-Japanese alliance. As Tokyo’s and Washington's defense planners increasingly rely on smaller but more advanced military forces, leaders from both countries will be able to share insights and lessons learned, enabling both forces to increase their readiness. By incorporating these new doctrines into joint military drills, Washington and Tokyo could help ensure that both countries' forces have experience working together, improving both their readiness and regional deterrence capacity. Thus, counterintuitively, Japan's declining population might permit the country to adopt a technology-first defensive posture that stabilizes its power and supports its regional cooperation in an uncertain time.

The End of the Underperformer

Japan's aging population is not, however, likely only to have a military impact. Rather, it will likely affect how Japan chooses to carry out its foreign policy. For decades, Japan has often been called the great “underperformer” in international relations circles, owing to the fact that the country is the world's third-largest economy yet wields far less clout in global alliances and international institutions than countries like Germany or Canada, which have smaller economies.

However, in recent years, the so-called underperformer seems to be stirring to life. During the pandemic, Japan made large-scale investments in vaccine production in Vietnam and throughout the region. Japan is now an active player in international supply chains and has taken a leading role in investing in Southeast Asia as part of the Quad, the regional grouping of the United States, Japan, Australia, and India.

What is driving Japan to wake up? Many will point to China or a more conservative government as potential factors, which are undoubtedly relevant. However, aging may also be playing a role. According to Nikkei, Japan's leading newspaper, many younger Japanese investors and companies are turning their focus abroad as their country's aging population and stagnant growth lead them to believe that foreign companies throughout Asia might be better investment destinations.

At first glance, this shift of young Japanese investing overseas may seem like a problem to Japanese politicians seeking domestic investment. However, increased foreign investment by Japanese companies throughout Asia will shore up Japan's relative geopolitical position, endowing it with friends from Bangkok to Jakarta. Improved ties with Southeast Asia will give Japan weight in international circles, especially in ASEAN, which will allow Japan to promote democratic values in the region and end its underperformer status. It will also reinforce efforts made by the United States and Australia to improve their outreach in Southeast Asia, strengthening the position of the Quad more broadly.

If trends continue, Japan's aging population will cause a continuing outflow of investment from the country across Southeast Asia, which will reap returns for Japanese companies and strengthen Japan's regional alliances more broadly. In the event of a conflict in a region, such ties could benefit Japan, including offering Japanese companies new markets to sell their products if access to traditional consumer bases is restricted.

Growing Old, Growing Strong?

Japan's aging population is considered by many to be the greatest challenge facing the country. As Japan wrestles with caring for its elderly population, it is worth considering how this aging population will affect Japan's foreign policy. It may drive Japan towards a more technology-focused military doctrine and deepen its influence in Southeast Asia. But will aging truly weaken Japan? The conventional answer is yes, but the true answer may be more complicated.

As automation comes to dominate 21st-century economies, capital-rich Japanese companies will be at the forefront of this revolution. Combined with a technology-focused, low-manpower military and a dynamic regional foreign policy, Japan might exercise more international power even as its population ages. But the real question is: for what will Tokyo wield this power? Japan could attempt to wield its power silently, as it has traditionally done. Alternatively, it might look to link up with the Quad and its allies to assert its influence in Southeast Asia, or it could chart some middle ground between the two. Whatever the case, it would be amiss to write off Japan—for even as the sun eventually sets in the West, it always rises again in the East.